Save the Fund

I’m writing in response to the article of April 19, 2012, titled “Fight bankruptcy proceeding.” I was not at the highly charged public meeting covering this topic, but it is clear from the comments I read that many people are very confused about the general issue. Everyone knows the Fund has serious problems but who caused those problems? Let me make this clear: Those who oversee and administer the Fund did not cause the problem! They are, however, attempting to solve those problems and save the Fund.

Chapter 11 bankruptcy is for the purpose of reorganizing the Fund so as to save it. It also prevents anyone from removing money from it for any reason other than paying the retirees. I myself plan (at some point) to retire and draw money from the Fund, and I find at least a little hope in the Chapter 11 bankruptcy proceedings. In a closely related issue, the proposal to allow people to withdraw 50 percent of their contributions is very destructive; does anyone think removing large sums of money will help save the Fund? If these withdrawals are allowed, the Fund will be done. Is that clear enough? If people start pulling money out, retirement checks will stop. There will no longer be enough money to write the checks! We need to infuse the Fund with more money, not take money out. That seems pretty obvious. Chapter 11 blocks these proposed withdrawals.

Keep in mind that even though the local courts have ruled that the central government owes the Fund a couple of hundred million dollars, they cannot force the government to pay. Chapter 11 moves the situation to the federal courts and they do have the power to compel payment. They could, for example, seize property, sell it, and put the money in the Fund.

Also, community members must remember just who caused the Fund’s money problems, and it was not the Fund or those who administer or oversee it. Our wonderful central government (legislators and governors) caused all the Fund’s problems. They borrowed tens of millions of dollars from the Fund and never paid it back. They also (as everyone should know) have not remitted the matching money that (by law) they are obligated to submit to the Fund. Money has been (is being) taken from our checks and placed in the Fund (which is proper); however, by law the government is mandated to match that money and place it in the Fund, but they have not done so. It is the incompetence of the central government (past and present) that has caused all these problems, and they have done absolutely nothing to try and fix them. Judge Govendo made some reasonable suggestion as to how to help the Fund stay afloat but none of his ideas have been implemented.

There are ways of saving (or at least helping) the Fund, such as implementing a 6-percent sales tax on purchases (but not on unprepared food or medicine) and placing the generated revenue in the Fund. Why hasn’t that been done? Also, it has been suggested that the proceedings from the golf course leases be place in the Fund. That would also help the situation; why hasn’t that been done? Basically, the central government (both past and present) caused the Fund problems and has done nothing to solve them! Those hired to oversee and run the Fund are trying to save it. I don’t think I can make this any clearer. I hope the majority of the community members now understand.

Thomas D. Wilkins
San Antonio, Saipan